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spk10: Ladies and gentlemen, thank you for standing by. I am Irene, your chorus call operator. Welcome and thank you for joining the integrated shipping service Q3 2022 earnings conference call. Throughout today's recorded presentation, all participants will be in a listen only mode. The presentation will be followed by a question and answer session. If you would like to ask a question, you may press star followed by one on your touch-tone telephone. Press the star key followed by zero for operator assistance. I would now like to turn the conference over to Ilana Holtzman, Head of Investor Relations. Please go ahead.
spk09: Thank you, Irene, and welcome to ZIM's third quarter 2022 financial results conference call. Joining me on the call today are Eli Glickman, ZIM's President and CEO, and Xavier Desclios in CFO. Before we begin, I would like to remind you that during the course of this call, we will make forward-looking statements regarding expectations, predictions, projections, or future events or results. We believe that our expectations and assumptions are reasonable. We wish to caution you that such statements reflect only the company's current expectations and that actual events or results may differ, including the Thank you, Ilana, and welcome, everyone.
spk03: today's home. The third quarter and nine months performance reflects continued solid execution and trends in our financial results and profitability. These results are consistent with our expectation for market normalization beginning in the second half of 2022, following an extended period of historic profit. However, Over the past several weeks, we've seen a steeper decline in freight rates than we previously assumed, as consumer demand in the US and elsewhere has softened. The pace of normalization has accelerated, and based on this evolving marketing environment, we've revised our full-year 2022 focus. For 2022, We now expect to generate adjusted EBITDA between $7.4 to $7.7 billion, compared to a previous guidance of $7.8 to $8.2 billion, and adjusted EBIT between $6 billion to $6.3 billion, compared to the previous projection of $6.3 to $6.7 billion. I note that based on our current guidance, 2022 adjusted EBITDA and adjusted EBIT are expected to be once again all-time records. Current market conditions illustrate the volatile and fast-paced nature of our market. The outlook for the global economy is very uncertain as we see various macroeconomic and geopolitical risks, rising inflation and interest rates, energy crisis in Europe, the extended war in Ukraine, just to name a few. Externally spending is down, and now when consumer spending on services can return to normal, demand for durable goods may be hurt even harder. All these felt challenging outlook for container shipping, particularly given the scheduled vessel deliveries planned for next year in 2024. Xavier, our CFO, will further discuss our guidance in the current market environment in greater detail later on the call and the potential impact of different factors, including IMO 2023 on our business. In accordance with our dividend policy to pay 30% of quarterly net income, our board declared a Q3 dividend of approximately $354 million of $2.95 per share. We continue to return substantial capital to shareholders, which remains a priority as we seek to create long-term value and enable shareholders to directly benefit from our strong results. So far, on account of 2022 results and including this quarter, we have returned over $1.26 billion or $10.55 per share in dividends. During the first nine months, As you can see in slide number four, revenue grew by 43% to $10.4 billion as compared to the same period in 2021. Driven by elevated freight rates and ZIM depreciated strategy, our adjusted EBITDA increased 55% and net income increased 43% compared to the nine-month period in 2021. Most importantly, While market conditions remain dynamic, we continue to deliver strong EBITDA and EBIT margins, highlighting our focus on profitability. Nine months 2022 adjusted EBITDA margin improved from 58% to 63%, and adjusted EBIT margin improved from 51% to 54%. Notably, our balance sheets balance sheet also continues to be very strong with total shareholders' equity of $5.8 billion at the end of the quarter. In the third quarter of 2022, our revenues grew 3% year-over-year to $3.2 billion, and we generated adjusted EBITDA and net income of $1.9 billion and $1.2 billion, respectively. Adjusted EBITDA and EBIT margin for the quarter was 60 percent and 48 percent, respectively, though lower than in Q3 2021. Going to slide five. In light of the fundamental changes in market conditions, It is important to highlight key elements of Zim's strategy, our commercial and operational agility. We believe these differentiators enhance our position to operate in a more normalized trade rate environment. Over the past two years, we've been proactive to best position Zim for long-term success as we continue to focus on optimizing profitability for the benefit of our shareholders. On slide five, we list several initiatives that we have previously discussed. Examples on the commercial side include our network of e-commerce lines to Australia and New Zealand and the U.S. East Coast. Our focus on the intra-Asia trade, which is a very dynamic trade and the world's largest trade in volume terms. and the expansion of our car carrier activity, which we intend to grow even further. We have demonstrated our ability to adapt to prevailing market conditions and capture commercial opportunities. Today, our commercial presence is more diversified, allowing us to benefit from and balance between varying trade dynamics. Yet, we remain committed to our global niche strategy and operate in trades we find the most attractive and where we can establish a competitive position. We believe this agility will provide us with significant resilience in this new market environment. Operationally, we remain very focused on securing the most competitive and efficient fleet possible to support our commercial strategy. As a reminder, we enter into our first agreement for the long-term charter of 10-15,000 TU vessels in February 2021. These vessels are ideally suited to serve on our core Asia-to-US East Coast service. This charter agreement will have a positive impact on our core structure next year as we take delivery of the vessels throughout 2023. We also expect to be the first liner to operate LNG vessels on this trade, offering ZIM an important commercial differentiating and enabling us to immediately reduce the carbon footprint of ZIM and its customers. Most recently, we enter into an important agreement with Shell to secure the supply of LNG and efficiently bunker these vessels. From our digital investment, I would highlight the progress of Ship Forward, our digital freight forwarder, which we launched about a year ago. As a reminder, Ship Forward is a pure digital solution on the front and back end, Targeting SMEs from the US and Canada, shipping from China and Vietnam. This capability offers an important efficiency compared to other industry players. While ship forward still has very modest revenue at this time, its technology has proven itself and the potential in this multi-billion market is clear. On that note, I will turn the call over to our CFO, Sophia, for his remarks on our financial results and additional comments on the market.
spk04: Thank you, Elie. And again, welcome, everyone.
spk05: On slide six, we present key financial and operational highlights. Our third quarter results reflect continued strong execution and the benefits of our differentiated approach combined with high freight rates. Specifically, our average freight rate for TU of $3,353 in the third quarter was 4% higher compared to the third quarter of 2021. During the first nine months of the year, our average freight rate was 43% higher than in the 2021 nine-month period. Our carriage volume in the third quarter declined 5% compared to the same period last year. Lower volumes during the third quarter resulted primarily from continued congestion as well as more normalized levels of consumer demand. Over the nine months period, our carrying volume was down 3% compared to approximately 2.5% decline in the market in the first nine months of 2022. We now anticipate our carrying volume will be slightly down in 2022 on a full year basis as compared to 2021. That is due to software demand and continued congestion. Our free cash flow in the third quarter totaled $1.6 billion compared to $1.7 billion in the third quarter of 2021. Our cash conversion rate remained strong at 84% as compared to last year's Q3 cash conversion rate of 83%.
spk04: Turning now to our balance sheet, total debt increased by 1.4 billion since prior year end.
spk05: As in recent quarters, this was mainly driven by the increased number of vessel fixtures, long-term charter duration, as well as higher daily charter rates. The first nine months of 2022, our cash, bank deposits, and investments increased by $300 million. Addicting on our fleet, the number of vessels we currently operate hasn't changed from our last report and currently stands at 149 vessels, of which 10 are car carriers. The average remaining duration of our current charter capacity is 27.4 months, down from the 28.6 months in August 2022, and bridging our current operating capacity to the scheduled delivery of our charted new-build vessels throughout 2023 and 2024. In 2023, 25 vessels are up for renewal, with 37 up for renewal now in 2024. This means we have a total of 62 upcoming vessels up for renewal compared to the expected delivery of 46 charted new-build vessels during this time period.
spk04: Moving on to slide seven, you can see that we delivered very strong results over the last two plus years.
spk05: And our net leverage ratio as a result has trended downwards at the same time and is at zero time as of September 30th. On slide eight, turning to our three and nine months financial performance, our differentiated and proactive approach has continued to yield profitable results. Revenue for the third quarter was $3.2 billion, up 3% as compared to Q3 2021, while net income was $1.2 billion compared to $1.5 billion in the comparable quarter. Adjusted EBITDA was $1.9 billion for the quarter compared to $2.1 billion last year, reflecting more normalized carried volumes and average freight rates. While market dynamics have shifted, cleaning continues to generate stronger EBITDA and EBIT margins. Nine-month margins were 63% for adjusted EBITDA and 54% for adjusted EBIT. This compares to 58% and 51% respectively in the same period last year. I would like also to note that our lower margins in the third quarter were driven by higher flow costs, resulting from a higher vessel cost due to the transition to our own operating capacity, following the termination of the slot purchase agreement we had with the 2F as of April 1st.
spk04: Coupled with on top, higher LSS4 broker rates. Turning to slide nine, we carried 842,000 TEUs in the third quarter, compared to 884,000 TEUs during the same period last year.
spk05: As you can see illustrated in the slide, lower volume on the Trans-Pacific caused by softening demand and continued effects from congestion in East Coast ports was partially upset by growth in intra-Asia, Latin America and cross-Suede. Intra-Asia in particular is a key focus for us and we do believe increasing presence to this growing trade will provide us with significant resilience as market conditions normalize. Next, we present our cash flow bridge. We ended the Q3 2022 with a total cash position of $4.4 billion, which includes cash and cash equivalent and also investments in bank deposits and other investment instruments. During the first nine months of the year, our agency did a bid of $6.6 billion, converted into $5 billion cash flow from operation. Other cash flow items included $293 million of net capex,
spk04: $1.1 billion of debt service, mostly lease liabilities, and dividend distribution of $2.9 billion.
spk05: Moving to our guidance, as already mentioned, with the pace of normalization accelerating, we have revised our full year 2022 forecast. We now expect to generate in 2022 adjusted EBITDA between $7.4 to $7.7 billion and adjusted EBIT between 6 to 6.3 billion. That is approximately 5% lower from an EBIT perspective than our previous guidance based on the midpoint of the range. Our underlying assumptions for our revised 2022 guidance reflect the steeper decline in spot trade rates and softer demand as discussed, in addition to adjusted contract rates.
spk04: Again, we now expect our carriage volume to be slightly lower than 2021.
spk05: On the cost side, we assume a slightly more favorable charter rate environment, though the impact is marginal given the limited number of charter renewals.
spk04: With that said, it is worth highlighting that these figures still do reflect fully erected highs for this. Turning to our view on the market environment, the supply demand balance forecast
spk05: shown here reflect lower demand growth assumptions for 2022 and 2023, in light of the worsening macroeconomic environment. With the order group to feed ratio current at approximately 27 percent, of which 2.3 million CEUs are scheduled for delivery in 2023, and another 4.7 million CEUs scheduled for delivery the following years, Supply growth is expected to be considerably greater versus demand growth than previously projected. The combination of weaker demand, falling freight rates, and risk of oversupply creates a challenging business environment for container shipping. Yet, I will discuss why various market dynamics may impact the effective supply and create a more stable business environment in the coming quarters.
spk04: Next, with the sublack, the mirror image of the decline in freight rates is the cooling off of the charter market.
spk05: The charter market is also indeed returning to more normalized conditions. As you can see here, charter rates have significantly dropped, and although supply is still tight, options to secure charters for shorter-term duration are gradually coming back.
spk04: The idle fleet has also slightly increased.
spk05: As we have indicated in the past, our view is that effective supply growth may be smaller than is implied by the current order book due to the various factors that are being detailed here on this slide 14. In 2023, port congestion, limited terminal capacity, and lacking land-side infrastructure will continue to partially offset the expected supply growth, as well as possible slow steaming resulting from IMO 2023 regulation, which are expected to go into effect in January next year. IMO 2023 and the decarbonization agenda may also motivate liners to retire older vessels, resulting in greater scrapping and offsetting some of the new blood capacity. Slippage may also result in lower supply growth. Zuri is currently suggesting that only approximately 60% of the deliveries will be on time in 2023 and 55% in 2024, as both carriers and shipyards may want to postpone delivery as the former are facing weaker demand and the latter are facing higher costs. Liner adapting deployed capacity to demand signs of which we have seen in recent weeks.
spk04: They also support industry efficiency. On this note, we will open the call for questions.
spk10: Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. If you are using speaker equipment today, please lift the handset before making your selection. Anyone who has a question may press star followed by one at this time. One moment for the first question, please. Our first question is from Omar Nocta of Jefferies. Please go ahead.
spk01: Hi, thank you. Hi, Ely and Xavier and Ilana. Good afternoon. I just wanted to ask about liquidity and your tax position today. You've obviously got a pretty sizable amount with $4.4 billion at the end of the quarter, which is over $35 a share, and it's sort of in line with the amount of debt and liabilities you have. But just in general, I wanted to ask, how do you view your current cash position? Is that a comfortable amount that you're carrying now with all the uncertainty out there in terms of the outlook for the container market? And are there any levers to pull or you're thinking of pulling in order to maybe raise even more cash? Just if you could comment just about your cash position.
spk04: Sure, Omar.
spk05: You know, we are very pleased that the balance sheet is strong at the time indeed where the market is entering into its normalization phase. And so having a very robust capital structure is a very good position to be in as we experience the downward trend in the market. So there is a lot of uncertainty today as to where the rates will stabilize when the normalization will eventually end. And we will obviously ask ourselves the question when we come to that point as to whether we have, we believe, extra cash to allocate to some other project or not. Today, the capital allocation priority continues to be the same as before, which is ensuring we continue to invest in growing our commercial prospects, securing capacity, renewing our equipment. We continue to look also at options to potentially grow organically and look at potential M&A transactions. That is something that we continue to look into, even though there is no rush for us to secure anything in this respect. And lastly, and very importantly, we want to continue to be true to our commitment to our shareholders, which is to return significant capital back to them.
spk01: Thanks, Xavier, for that, Feller. And, yeah, maybe just on that final point you were making about the, you know, returning capital, how do you think about that dividend policy going forward? I know the board ultimately is going to make the decision, but how do you think about the, you know, use of cash at the moment given the softness in the market and does a true up to that 50% payout next quarter for the full year of 22, does that make sense? Or do you think sticking with 30% is...
spk05: more in line with your thinking you know at this stage what has been very important to the company is to say what we intend to do and execute on what we said we intended to do we've been consistent in that approach i think since the first day of us being a listed company and we have adjusted on several occasions of dividend policy but today this quarter we continue to be true to our words and announce this 30 dividend payout i think when it comes to what may be the discussion or the decision of the of the the company uh in march when we release our full year financial statement it's a little bit premature today to apply as to where we will land the consideration that will be taken at the time will be obviously how did we close the year but also as importantly what do we think the outlook is ahead of us, and there is a lot of unknown data at this point, which again, I think, make us say that it's a little bit too early to premature to opine on what might be the true payment next year.
spk01: Okay. No, that's fair. And maybe just one final one. Just regarding the cost structure at the moment, are there any levers to pull, you think, in terms of lowering run rate costs on some of the ships you have in-house today, not necessarily the new buildings with the vessels on the water, the 149 that have roughly 27 months left of duration. Are there opportunities to maybe think about approaching the ship owners and lowering their base in exchange for added duration? Is that something that you're thinking of? Is that a realistic measure that you guys think is worth undertaking?
spk05: This is always something that we can consider. I mean, the ship owners are always willing to listen and engage with the charterer if we were to agree to commit for longer that we could revisit the commercial term. So maybe this is something that uh that might happen in the in the future i think today we are focusing on making sure that we extract as much cost as we can on the uh you know on the the way we operate the uh the productivity level of each of the agencies where uh where people are on the field and on the ground use and leverage our digital initiative that also believe will allow us to increase the productivity levels entering and negotiating with all of our suppliers, not only the vessel suppliers, but all the terminals, the rates for next year. So there is a lot for us obviously to work on in order to continue to try to extract or limit. the cost increase as much as we can in our organization going forward. So we focus on what we can control and be ready for the new normal of next year.
spk04: Okay, very good. Thanks for the caller. I'll turn it over. Our next question is from Alexia Dugani of Barclays.
spk10: Please go ahead.
spk08: Good afternoon. Thank you for taking my questions. I had two to start first. Just on the implied Q4 EBITDA guide of around $1 billion, obviously the exit rate from Q3 has been quite strong, but clearly since mid-September we've seen the spot rate drop declined quite considerably. How should we think about, you know, the first half of Q4 versus the second half of Q4 just to understand, you know, the exit rate as we go into the next year? Then secondly, on sort of your comments about sort of unit cost ability to change, when we look at 2023 and the current trajectory of spot rates How can you protect the stability? What action are you able to take other than to basically reduce the capacity based on the delta you have between the upcoming vessels and the ones that are expiring? So, yes, those two, please. Thank you.
spk05: Right. So, starting with your first question, it is very true that the pace of the, maybe should I say, the rate erosion or the, if we take the FTFI index, the decrease has accelerated over the past few weeks. So, towards the second part of the third quarter, it's been accentuated. So, we have factored in our Q4 assumptions that lead to the guidance that we communicated today, a continuation of the trend to some extent. And so we expect Q4 average to be less than what we delivered into Q3. In addition to that, from a volume perspective, we are also considering, and the two are being leaked, In a way, there is, on the one hand, the demand that is softening, and as a result, the company and also, I think, the industry might take some actions in terms of additional blanks. So we have also factored in a bit more of those in the first quarter, also explaining why the volume assumptions are a little bit lower than what we initially planned for. To your second question, looking at what it is that we can do on our cost structure, we talked about the vessel cost. We've been, as you know, Zim has been transitioning from already over the past two years, transitioning from being very exposed to the shorter charter market, but gradually with all the contracts that we signed with the CISP plan to start with, other vessel owners we have shifted towards being more exposed to long-term charter in the years to come and we have experienced an increase in unit cost up until this quarter and maybe into the next but in 2023 and beyond as we will take delivery of those new builds capacity the cost per TEU will mechanically go down in terms of the vessel cost the cost of sourcing capacity. In terms of variable costs, also with the congestion easing, we are going to incur less storage costs. The flow of equipment is going to be improved as well. We are looking at how we can best optimize the usage of our fleet of containers. Today we have close to 1 million cu equivalent capacity of equipment and it is very possible that we will re-deliver some of the older equipment as the flow of cargo eases into 2023.
spk04: So we will be more efficient in operating our fleet of containers. Can I just ask a follow-up on the first question?
spk08: In terms of the split between the evolution and if we look at how sold rates have accelerated, would it be fair to say the EBITDA is skewed towards the first half of Q4, roughly two-thirds, one-third, if I just look at the trajectory of rates?
spk05: Alexei, I'm not sure I understand your question. Are you talking about the three months into Q4, whether we expect a further reduction in November and then a stabilization in December?
spk08: Yeah, exactly. Whether you expect most of the profitability in Q4 to come from October and November and less in December.
spk05: Today, we expect the rate to continue to go down. It depends also on the trade because we think that there are some trades that have been more exposed to the rate deterioration than others. To some extent, for example, the Atlantic is behaving better today. The US West Coast has been suffering much more than the other trade lakes. So we need to look at the mix of trade where we operate. We still take the view that the rate will continue to go down. You see that the guidance in terms of range is still $300 million. So obviously we cannot be absolutely sure to what will be the prevailing rate for the remainder of the year. We know that what the rate will be in the weeks to come, up until the end of the year, somewhat will affect also are Q4 performance, even if the boxes have not reached their final destination by the end of the year.
spk04: That's the accounting rules. Okay, understood. Thank you. Our next question is from Satish Usivakumar of Citigroup.
spk10: Please go ahead.
spk06: Thanks again for the presentation. I've got two questions here. So firstly, on your guidance, right, you did say that one of the reasons for revision and guidance is lower contract rates. If I understand right, you got your contract rate exposures mainly from Trans-Pacific, which normally resets in April, right? So why does we are actually seeing a lower contract rate versus say Q3, or this is your previous expectation? Any color on that, and also directionally, like how much it's actually come down versus your previous expectation. And the second one is on the supply, like flexibility on supply. You made it clear that, okay, you've got about 60 vessels that are on charter that's due for renewal versus 40 vessels you are taking in. But that's more like, say, in two years' time where you get a better supply management there. But into next year, given the uncertainties and if potentially further downturn in demand, what are the tools that you have in terms of supply management as you go into H1 next year? Thank you.
spk05: Thank you. Thank you, Satish. The question on the contract rate, just to... Back into perspective, you're absolutely right that it's very much relevant for the trans-Pacific trading where we operate. And we normally contract 50% of our volume with a long-term contract and remain exposed to the spot market for the other 50%. So clearly what is happening with the steep decline in the spot market on some of the trade, the spot market went below the contract rate. And you may remember that initially when we closed the contract season in April, we closed at elevated rates compared to the prior year. With that, the market in terms of rates went down and crossed at some point in the quarter the average rate that we secured with our customers. But more importantly, from our customer perspective, the demand was not there and the volume was not there. So we had to live with this new reality and engaged with our customers. Those customers are not customers for one year, for one season. They are recurring customers with whom we have a long-term relationship and we intend to continue to have a long-term relationship. So clearly the spread between the contract rate in terms of dollar per TEU and the spot was increasing, we had to sit down and agree and revisit the pricing for those customers in order to also protect to some extent some of the volume. This is what has happened. We need to be pragmatic and make sure that we find the middle ground between the interest of our customers and ours. your second question with respect to the supply side and the flexibility that we have we still believe that you know we said that 25 vessels are up for renewal and next year this is that this is a significant amount that gives us some flexibility and also when we look at which are the vessels that we are going to take delivery from Next year, out of the 46 that we intend to get between 2023 and 2024, we'll get 18 of those in 2023. And nine of them will be the 15,000 TEUs, the large capacity vessels that we intend to deploy on the Asia-U.S. East Coast. The other nine will be 5,000 YBIN and three 7,000 TEUs. And the 15,000 TEUs that we are eagerly waiting for those vessels because they will be the most efficient ones. They will replace capacity today that at the cost which from running the ship will be very similar, allowing us to increase the intake by 50%. So if we manage to increase the intake, it will be an additional profit to the trade. And if we don't, it will be a neutral. What obviously may happen, depending on what the market conditions are, we are also not alone in this trade. As you know, we generally operate with the Western NFC, the 2M partners, and there might be also some discussions around the overall network. I mean, there are a lot of options for us to entertain and consider as we go along into 2023 and take those deliveries of those shifts.
spk07: Okay. Thank you. Thanks, Xavier. And thanks, Ellie. And then, hello, Nacho. Thanks very much.
spk10: Our next question is from Sam Bland of J.P. Morgan. Please go ahead.
spk00: Thank you. Thank you for the question. The first one is on the decision-making in terms of capacity across the market so far due to 2020 with Have we seen much of that yet? And if not, is that surprising? And the second question is, if we look at where spot rates are, are there any lanes or regions where you'd say current spot rates are sort of below the break-even level for them?
spk04: Thank you.
spk05: uh sam i i hope i got your question right you were a little bit breaking up but uh from what i understand the first question was around the land sailing and uh and uh whether we think that there will be more of a ahead of us than there's been over the past few weeks it is it is very likely it's very possible and the objective of the company as far as jim goes remains the same we intend to be profitable in the trade where we operate and we don't wish to sell capacity at a lot. So the idea will be to make sure that we always operate our capacity and redeploy capacity, rearrange the network of trades potentially online where we operate in order to always be in a position where we avoid losing money on a given voyage. So if the rates continue to slide, the level of blanking will most probably continue to increase over the coming weeks. And if we go to your second question, which was whether there are some trades where we think the spot rate has already crossed the break-even point from a profitability perspective. I think in some trades we are not far from that and maybe already crossed the line. I was referring to earlier on to the trade between Asia to LA, which has been a trade that has been very severely, maybe one of the most early on severely impacted by the sliding in the freight rate. As you know, on those trades, we operate a specific service. We operate an expedited service. We still command a premium on the SCFI rate, but there is not much more room for further reduction in this trading. The Atlantic is still quite resilient. The U.S. East Coast has been a bit more resilient as well. Latin America was very resilient in the quarter. It's now sliding a bit more. So there is a difference in the pace of the normalization, but eventually we think all the trades will find a new equilibrium at some point.
spk02: Thank you very much.
spk10: This concludes our Q&A session and I hand back to Eli Glickman, President and CEO, for closing comments.
spk03: Thank you. Zim continues to deliver outstanding execution and profitable growth reflected in our third quarter in nine months 2022 financial results. EBITDA and EBIT margins remain strong and our outstanding cash generation has enabled Zim to it lay over $1.26 billion at $10.55 per share in 2022 dividends. While the pace of market normalization has accelerated over the past several weeks, we remain on track to generate 2022 adjusted EBITDA and EBIT that will represent full year records. I would like to conclude by highlighting Zim has been proactive over the last two years, taking a significant step to enhance and build resilience in our business to best position Zim for the new normal. Commercially, we diversify our business and have multiple growth engines. We've also secured competitive, efficient, and cost-effective new build capacity to support our commercial strategy for the benefit of customers and shareholders. Thank you very much for tuning in. We look forward to reporting on our continued progress.
spk04: Have a good day. Ladies and gentlemen, the conference is now concluded and you may disconnect your telephone.
spk10: Thank you for joining and have a pleasant day. Goodbye.
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